RAILWAYS

Why Indian Railways wants private passenger trains on its network – everything you want to know

Private trains on Indian Railways: In a bid to improve the country’s railway system, the Modi government is envisaging around Rs 50 lakh crore of investment in railway projects up to the year 2030. It is being expected that around 70% of Indian Railways’ freight trains, will shift to the two upcoming Dedicated Freight Corridors (DFCs) from December 2021. This will result in freeing up a lot of capacity to introduce more passenger trains with higher speeds and better services. For Indian Railways, running of passenger trains is a loss-making business as on average, only around 57% of the cost is recovered through tickets, according to an IE report. Hence, the rest of it is cross-subsidized from the earnings of freight train operations.

Why are private trains being invited to run on Indian Railways?

To cut losses as well as to convert that opportunity into a money-making enterprise, the Modi government has decided that some of the future trains will be run by private companies, over the Indian Railways network, in a business model never tried in India before. According to the report, this move envisages around Rs 30,000 crore of total investment into the railway system through rolling stock as well as other expenditure, to be borne by the private operators. There is just one precondition that the trains introduced by private companies are a definite upgrade from what is offered by the national transporter. The idea of the government is to give an option of superior train services to passengers, without Indian Railways having to spend any money on it.

Source
financial express
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